[Federal Register Volume 76, Number 87 (Thursday, May 5, 2011)]
[Rules and Regulations]
[Pages 25550-25565]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10875]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 482 and 485

[CMS-3227-F]
RIN 0938-AQ05


Medicare and Medicaid Programs: Changes Affecting Hospital and 
Critical Access Hospital Conditions of Participation: Telemedicine 
Credentialing and Privileging

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

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SUMMARY: This final rule will revise the conditions of participation 
(CoPs) for both hospitals and critical access hospitals (CAHs). The 
final rule will implement a new credentialing and privileging process 
for physicians and practitioners providing telemedicine services. 
Currently, a hospital or CAH receiving telemedicine services must go 
through a burdensome credentialing and privileging process for each 
physician and practitioner who will be providing telemedicine services 
to its patients. This final rule will remove this undue hardship and 
financial burden.

DATES: Effective Date: These regulations are effective on July 5, 2011.

FOR FURTHER INFORMATION CONTACT: CDR Scott Cooper, USPHS, (410) 786-
9465. Jeannie Miller, (410) 786-3164.

SUPPLEMENTARY INFORMATION: 

I. Background

    This final rule reflects the Centers for Medicare and Medicaid 
Services' commitment to the general principles of the President's 
Executive Order released January 18, 2011, entitled ``Improving 
Regulation and Regulatory Review.'' The rule revises the conditions of 
participation (CoPs) for both hospitals and critical access hospitals 
(CAHs) to: (1) Make current Federal requirements more flexible for 
rural and/or small hospitals and for CAHs; and (2) encourage innovative 
approaches to patient-service delivery.
    CMS regulations currently require a hospital to have a 
credentialing and privileging process for all physicians and 
practitioners providing services to its patients. The regulations 
require a hospital's governing body to appoint all practitioners to its 
hospital medical staff and to grant privileges using the 
recommendations of its medical staff. In turn, the hospital medical 
staff must use a credentialing and privileging process, provided for in 
CMS regulations, to make its recommendations. CMS requirements do not 
take into account those practitioners providing only telemedicine 
services to patients. Consequently, hospitals apply the credentialing 
and privileging requirements as if all practitioners were onsite. This 
traditional and limited approach fails to embrace new methods and 
technologies for service delivery that may improve patient access to 
high quality care.
    This final rule will permit hospitals and CAHs to implement a new 
credentialing and privileging process for physicians and practitioners 
providing telemedicine services. The removal of unnecessary barriers to 
the use of telemedicine may enable patients to receive medically 
necessary interventions in a more timely manner. It may enhance patient 
follow-up in the management of chronic disease conditions. These 
revisions will provide more flexibility to small hospitals and CAHs in 
rural areas and regions with a limited supply of primary care and 
specialized providers. In certain instances, telemedicine may be a 
cost-effective alternative to traditional service delivery approaches 
and, most

[[Page 25551]]

importantly, may improve patient outcomes and satisfaction.
    As noted above, the current Medicare Hospital conditions of 
participation (CoPs) for credentialing and privileging of medical staff 
at 42 CFR Sec.  482.12(a)(2) and Sec.  482.22(a)(2) require the 
governing body of the hospital to make all privileging decisions based 
upon the recommendations of its medical staff after the medical staff 
has thoroughly examined and verified the credentials of practitioners 
applying for privileges, and after the staff has applied specific 
criteria to determine whether an individual practitioner should be 
privileged at the hospital. The current critical access hospital (CAH) 
CoPs at 42 CFR 485.616(b) similarly require every CAH that is a member 
of a rural health network to have an agreement for review of physicians 
and practitioners seeking privileges at the CAH. The agreement must be 
with a hospital that is a member of the network, a Medicare Quality 
Improvement Organization (QIO), or another qualified entity identified 
in the State's rural health plan. In addition, the services provided by 
each doctor of medicine or osteopathy at the CAH must be evaluated by 
one of these same three types of outside parties. These requirements 
apply to all physicians and practitioners seeking privileges at the 
hospital or CAH, respectively, regardless of whether services will be 
provided in person and onsite at the hospital or CAH, or remotely 
through a telecommunications system.
    While hospitals may use third-party credentialing verification 
organizations to compile and verify the credentials of practitioners 
applying for privileges, the hospital's governing body is still legally 
responsible for all privileging decisions. Similarly, each CAH is 
required to have its privileging decisions made by either its governing 
body or the person responsible for the CAH.
    In the past, hospitals that were accredited by The Joint Commission 
(TJC) were deemed to have met the Medicare CoPs, including the 
credentialing and privileging requirements, under TJC's statutory 
deeming authority. Section 125 of the Medicare Improvements for 
Patients and Providers Act of 2008 (Pub. L. 110-275, July 15, 2008) 
(MIPPA), terminated the statutory recognition of TJC's hospital 
accreditation program, effective July 15, 2010. The law now requires 
TJC to secure CMS approval of its standards in order to confer Medicare 
deemed status on hospitals.
    Under its previous statutory deeming authority, TJC has permitted 
``privileging by proxy,'' which had allowed TJC-accredited hospitals to 
privilege ``distant-site'' (as that term is defined at section 
1834(m)(4)(A) of the Social Security Act (the Act)) physicians and 
practitioners. TJC privileging by proxy standards allowed for one TJC-
accredited facility to accept the privileging decisions of another TJC-
accredited facility utilizing a streamlined independent determination 
process, rather than making an individualized decision based on the 
practitioner's credentials and record. Even though they were TJC-
accredited, hospitals that have used this method to privilege distant-
site medical staff technically did not meet the CMS requirements that 
applied to other hospitals. When we learned of specific instances of 
such noncompliance through on-site validation surveys by State survey 
agencies, the hospital was required to change its policies to come into 
compliance. However, the majority of Joint Commission-accredited 
hospitals were not routinely subjected to validation surveys of their 
privileging practices, and it appears that many of them were employing 
the practices permitted by The Joint Commission.
    With the loss of statutory status for its hospital accreditation 
program, The Joint Commission is now required to conform its 
accreditation program to the Medicare requirements, including the 
provisions governing credentialing and privileging, and enforce it 
accordingly in all of its accredited hospitals.
    TJC-accredited hospitals, therefore, have been concerned that they 
may be unable to meet the long-standing CMS privileging requirements 
while sustaining their current telemedicine agreements. Small hospital 
medical staffs, in particular, are concerned about the burden of 
privileging hundreds of specialty physicians and practitioners that 
large academic medical centers make available to them. Because of the 
complexity of the issues, and to minimize disruption to accredited 
hospitals and CAHs, we decided to allow additional time for The Joint 
Commission to ensure conformity to the Medicare Conditions of 
Participation (CoPs). Accordingly, we notified TJC that we would expect 
implementation of its new accreditation standards no later than the 
effective date of this final rule.
    Upon reflection, we came to the conclusion that our present 
requirement is a duplicative and burdensome process for physicians, 
practitioners, and the hospitals involved in this process, particularly 
small hospitals and CAHs, which often lack adequate resources to fully 
carry out the traditional credentialing and privileging process for all 
of the physicians and practitioners that may be available to provide 
telemedicine services. In addition to the costs involved, small 
hospitals and CAHs often do not have in-house medical staff with the 
clinical expertise to adequately evaluate and privilege the wide range 
of specialty physicians that larger hospitals can provide through 
telemedicine services. The public comments we received on the proposed 
rule, which we discuss in this final rule, overwhelmingly reinforced 
this perception.

II. Provisions of Proposed Rule and Response to Comments

    We published a proposed rule in the Federal Register on May 26, 
2010 (75 FR 29479). In that rule, we proposed to revise both the 
hospital and CAH credentialing and privileging requirements to 
eliminate regulatory impediments and to allow for the advancement of 
telemedicine nationwide.
    While telemedicine is included under the broader scope of 
telehealth, we consider telemedicine, as the term is used in the 
proposed rule and as we use it here in this final rule, to be the 
provision of clinical services to patients by practitioners from a 
distance via electronic communications. The distant-site telemedicine 
physician or practitioner provides clinical services to the hospital or 
CAH patient either simultaneously, as is often the case with teleICU 
services, for example, or non-simultaneously, as may be the case with 
many teleradiology services. ``Simultaneously'' would mean that the 
clinical services (for example, assessment of the patient with a 
clinical plan for treatment, including any medical orders needed) are 
provided to the patient in ``real time'' by the telemedicine 
practitioner, similar to the actions of an on-site practitioner when 
called in by a patient's attending physician to see the patient. 
Generally, payment for telehealth services under section 1834(m) of the 
Act, distinguished from ``telemedicine services'' as discussed here, 
requires that services be provided to a patient in real time while the 
patient is physically present at the originating site. ``Non-
simultaneously'' means that while the telemedicine practitioner still 
provides clinical services to the patient upon a formal request from 
the patient's attending physician, such services may involve after-the-
fact interpretation of diagnostic tests in order to provide an 
assessment of the patient's condition and do not necessarily require 
the telemedicine practitioner to directly assess the patient in ``real 
time.'' This would be similar to the services

[[Page 25552]]

provided by an on-site radiologist who interprets a patient's x-ray or 
CT scan and then communicates his or her assessment to the patient's 
attending physician who then bases his or her diagnosis and treatment 
plan on these findings. In fact, the actual location (distant-site 
versus on-site) of the radiologist performing the readings is often the 
major distinguishing factor between in-house radiologists and 
teleradiologists. These services are not payable as ``telehealth 
services'' under section 1834(m) of the Act because in addition to not 
meeting the ``real time'' requirements, these services do not meet the 
telehealth patient location requirements also contained under this 
section of the Act and upon which the CMS telehealth payment 
requirements are based.
    We also indicated that the proposed revisions would preserve and 
strengthen the core values of the credentialing and privileging process 
for all hospitals, provide accountability to all patients, and assure 
that medical staff are privileged to provide services in the hospital 
based on evaluation of the practitioner's medical competency.
    We provided a 60-day public comment period in which we received a 
total of 113 timely comments from hospitals, CAHs, physicians, 
professional organizations, providers of teleradiology interpretation 
services, other specialty practitioners providing telemedicine 
services, and hospital systems. Overall, the majority of commenters 
were supportive of the proposed changes, but many also raised several 
separate issues. The most common comment expressed was that the 
proposed regulation did not go far enough in restructuring privileging 
and credentialing requirements for telemedicine providers. Summaries of 
the major issues and our responses are set forth below.

Hospital CoPs (Sec.  482.12 and Sec.  482.22)

    The proposed revisions to the hospital CoPs for the credentialing 
and privileging of telemedicine physicians and practitioners are 
contained within two separate CoPs: Sec.  482.12, ``Governing body,'' 
and Sec.  482.22, ``Medical staff.''
    For the Governing body CoP, we proposed to add a new paragraph, 
Sec.  482.12(a)(8), which would require the hospital's governing body 
to ensure that, when telemedicine services are furnished to the 
hospital's patients through an agreement with a Medicare-participating 
hospital (the ``distant-site'' hospital as defined at section 
1834(m)(4)(A) of the Act), the agreement must specify that it is the 
responsibility of the governing body of the distant-site hospital 
providing the telemedicine services to meet the existing requirements 
in Sec.  482.12(a)(1) through (a)(7) with regard to its physicians and 
practitioners who are providing telemedicine services. These existing 
provisions cover the distant-site hospital's governing body 
responsibilities for its medical staff that all Medicare-participating 
hospitals must meet.
    We proposed at Sec.  482.12(a)(8) to allow the governing body of 
the hospital whose patients are receiving the telemedicine services to 
grant privileges based on its medical staff recommendations, which 
would rely on information provided by the distant-site hospital, as a 
more efficient means of privileging the individual distant-site 
physicians and practitioners providing the services.
    This provision would be accompanied by the proposed requirement in 
the ``Medical staff'' CoP at Sec.  482.22(a)(3), which would provide 
the basis on which the hospital's governing body, through its agreement 
as noted above, could choose to have its medical staff rely upon 
information furnished by the distant-site hospital when making 
recommendations on privileges for the individual physicians and 
practitioners providing such services. We specified that this option 
would allow the hospital's medical staff to rely upon the credentialing 
and privileging decisions of the distant-site hospital in lieu of the 
current requirements at Sec.  482.22(a)(1) and (a)(2), which require 
the hospital's medical staff to conduct individual appraisals of its 
members and examine the credentials of each candidate in order to make 
a privileging recommendation to the governing body. In the proposed 
rule, we stated that this option would not prohibit a hospital's 
medical staff from continuing to perform its own periodic appraisals of 
telemedicine members of its staff, nor would it bar them from 
continuing to use the traditional credentialing and privileging process 
required under the current regulations. Our intent of this proposed 
requirement was to relieve burden for smaller hospitals by providing 
for a less duplicative and more efficient privileging scheme with 
regard to physicians and practitioners providing telemedicine services.
    However, in an effort to ensure accountability to the process, we 
proposed within this same provision (Sec.  482.22(a)(3)) that the 
hospital, in order to choose this less burdensome option for 
privileging, would have to ensure that--(1) The distant-site hospital 
providing the telemedicine services was another Medicare-participating 
hospital; (2) the individual distant-site physician or practitioner was 
privileged at the distant-site hospital providing telemedicine 
services, and that this distant-site hospital provides a current list 
of the physician's or practitioner's privileges; (3) the individual 
distant-site physician or practitioner held a license issued or 
recognized by the State in which the hospital whose patients are 
receiving the telemedicine services is located; and (4) with respect to 
a distant-site physician or practitioner granted privileges by the 
hospital, the originating-site hospital had evidence of an internal 
review of the distant-site physician's or practitioner's performance 
under these telemedicine privileges and sent the distant-site hospital 
this information for use in its periodic appraisal of the individual 
distant-site physician or practitioner. We also proposed that the 
information sent for use in the periodic appraisal would, at a minimum, 
have to include all adverse events that did result or could have 
resulted from telemedicine services provided by the distant-site 
physician or practitioner to the originating hospital's patients, and 
all complaints the originating site hospital had received about the 
distant-site physician or practitioner.
    Within the revisions to the hospital CoPs, we also proposed that 
additional language be added to the current requirement at Sec.  
482.22(c)(6), which requires that the hospital's medical staff bylaws 
include criteria for determining privileges and a procedure for 
applying the criteria to individuals requesting privileges. We proposed 
to add language to stipulate that in cases where distant-site 
physicians and practitioners were requesting privileges to furnish 
telemedicine services through an agreement between hospitals, the 
criteria for determining those privileges and the procedure for 
applying the criteria would be subject to the proposed requirements at 
Sec.  482.12(a)(8) and Sec.  482.22(a)(3).
    Comment: We received several comments that are outside the scope of 
this rule. Specifically, several commenters requested that we consider 
establishing a central credentialing bank that would provide overall 
clearance for telemedicine services, possibly through regional compacts 
or reciprocity agreements. A number of commenters recommended that all 
TJC-accredited facilities (including hospitals) be able to share 
credentialing. A few commenters suggested that we establish a national 
licensing process for physicians and other practitioners in order to 
ease the

[[Page 25553]]

burden associated with credentialing and privileging.
    Response: We thank all commenters for their comments, but are not 
responding to these comments here because they are outside the scope of 
this rulemaking.
    Comment: The majority of commenters supported the changes proposed. 
However, most of these commenters felt that the revisions to the CoPs 
did not go far enough in addressing the burdens borne by those small 
hospitals and CAHs that, through agreements and/or contracts, use the 
telemedicine services of practitioners who are not part of the medical 
staff of a Medicare-participating hospital. The commenters pointed out 
that, under the proposed requirements, small hospitals and CAHs would 
still be required to perform the duplicative and burdensome process of 
credentialing and privileging practitioners that provide telemedicine 
services through a distant-site telemedicine entity that is not a 
hospital.
    Several commenters provided examples of simultaneous and non-
simultaneous telemedicine services, such as teleradiology, teleICU, 
teleneurology, and telepathology, where distant-site physicians and 
practitioners provide radiology, ICU/critical care medicine, neurology, 
and pathology services to hospital and CAH patients under the auspices 
of a non-hospital entity that is nationally accredited as having met a 
national accreditation organization's (AO) standards for credentialing 
and privileging of medical staff (in addition to other standards 
established by the national AO). Many commenters specifically mentioned 
the TJC's Ambulatory Care accreditation program, which surveys and 
accredits nearly 2,000 ambulatory care entities (of which these non-
hospital telemedicine entities, along with ambulatory surgery centers, 
imaging centers, and dentist offices, are included) out of 
approximately 30,500 ambulatory care entities nationwide. Commenters 
suggested that CMS include these telemedicine entities in the 
requirements so that small hospitals and CAHs would be able to enter 
into agreements with them.
    Many commenters stated that including the medical staff of these 
distant-site telemedicine entities as part of an optional and 
streamlined credentialing and privileging process, as we have already 
proposed for distant-site Medicare-participating hospitals, would 
increase the overall effectiveness of this rule. They posited that if 
the goals of this rule were to greatly improve patient care by 
increasing patient access to specialty services and reduce the burdens 
and costs for hospitals and CAHs by removing the impediment of the 
traditional credentialing and privileging process, then excluding 
distant-site telemedicine entities would severely limit such goals. In 
addition, commenters stated that telemedicine practitioners are part of 
a growing national network that is supported by both hospitals and non-
hospital telemedicine entities.
    Response: We appreciate the comments supporting the rule as well as 
the suggestions for improving the rule. When drafting the proposed 
rule, we gave much thought and consideration to ideas that were similar 
to those that commenters have expressed regarding the inclusion of non-
hospital telemedicine entities as part of these requirements. After 
careful consideration of the comments and the options available to us 
for revising the proposed rule, we have concluded that it is important 
that the medical staff of a distant-site telemedicine entity, which is 
not a Medicare-participating hospital, be included in an optional and 
streamlined credentialing and privileging process for those hospitals 
and CAHs electing to enter into agreements for telemedicine services 
with such entities. We believe that this inclusion would draw us 
significantly closer to accomplishing the stated goals of this rule, 
which are--(1) Increasing patient access to specialty services; and (2) 
reducing burden on small hospitals and CAHs.
    However, this decision presented significant challenges to us as we 
sought to balance our desire to achieve the worthy goals noted above 
with the equally important mission of ensuring, through our regulatory 
authority and responsibility, the health and safety of all patients. As 
we contemplated revisions to the proposed rule that would broaden its 
application, the most significant challenge that we faced was 
reconciling inclusion of distant-site telemedicine entities into this 
new streamlined process without CMS having any regulatory or oversight 
authority over these entities. We also note that we do not have any 
oversight or approval process for accreditation programs (such as that 
of TJC) for these entities. This situation differs greatly from our 
proposed inclusion of other Medicare-participating hospitals, where we 
are assured through the State survey or Medicare-approved accreditation 
processes that distant-site hospitals providing telemedicine services 
are in compliance with our CoPs, particularly those pertaining to 
credentialing and privileging of medical staff.
    In addition, we note that there is no statutory definition for a 
telemedicine entity contained in the Act. Therefore, for the purposes 
of this rule, we are defining a distant-site telemedicine entity as one 
that--(1) Provides telemedicine services; (2) is not a Medicare-
participating hospital (therefore, a non-Medicare-participating 
hospital that provides telemedicine services would be considered a 
distant-site telemedicine entity also); and (3) provides contracted 
services in a manner that enables a hospital or CAH using its services 
to meet all applicable CoPs, particularly those requirements related to 
the credentialing and privileging of practitioners providing 
telemedicine services to the patients of a hospital or CAH.
    Taking all of these factors into consideration, we came to the 
conclusion that any revisions to the regulatory language finalized here 
would need to hold distant-site telemedicine entities accountable to 
the originating-site hospital for meeting CMS practitioner 
credentialing and privileging standards. Likewise, hospitals and CAHs 
using telemedicine services will need to provide, upon request when 
surveyed, the most current telemedicine services agreement showing that 
the distant-site entities providing the services are required to comply 
with the CMS standards (even though CMS has no direct authority over 
those entities) in order for the hospital or CAH to make use of the 
more streamlined process when credentialing and privileging 
practitioners from these distant-site telemedicine entities. Similar to 
our regulations proposed for hospitals and CAHs using the telemedicine 
services of distant-site Medicare-participating hospitals, the written 
agreement between the hospital or CAH and the distant-site telemedicine 
entity will be the foundation for ensuring accountability on both 
sides. However, due to the differences already discussed between 
Medicare-participating distant-site hospitals providing telemedicine 
services and distant-site telemedicine entities providing similar 
services, there must also be differences in the way the regulations are 
written.
    Therefore, in addition to the proposed requirements, we are also 
finalizing new provisions that will apply to the credentialing and 
privileging process and the agreements between hospitals or CAHs and 
distant-site telemedicine entities (Sec.  482.12(a)(9) and Sec.  
482.22(a)(4) for hospitals; Sec.  485.616(c)(3) and (c)(4) for CAHs). 
These new provisions will require the governing body of the hospital 
(or the CAH's governing body

[[Page 25554]]

or responsible individual), through its written agreement with the 
distant-site telemedicine entity, to ensure that the distant-site 
telemedicine entity, acting as a contractor of services, furnishes its 
services in a manner that enables the hospital (or CAH) to comply with 
all applicable conditions of participation and standards. For the 
contracted services, the applicable CoPs and standards include, but are 
not limited to, the credentialing and privileging requirements for 
distant-site physicians and practitioners providing telemedicine 
services.
    For hospitals, we have directly linked this new requirement to an 
existing requirement at Sec.  482.12(e), which requires the hospital's 
governing body to ensure that a contractor of services to the hospital 
(in this case, the distant-site telemedicine entity) furnishes services 
that permit the hospital to comply with all applicable conditions of 
participation and standards for contracted services. The applicable 
conditions of participation and standards would include the 
credentialing and privileging requirements as currently found at Sec.  
482.12(a)(1) through (a)(7) of this section and would apply (in 
accordance with the hospital's policy) to the telemedicine entity's 
physicians and practitioners that provide telemedicine services to the 
hospital's patients.
    For CAHs, we also linked these new requirements to an existing 
requirement (at Sec.  485.635(c)(4)) that, like Sec.  482.12(e) for 
hospitals, pertains to contactors of services and the CAH governing 
body's (or responsible individual's) obligation to ensure that 
contracted services are furnished in a manner that enables the CAH to 
meet all applicable conditions of participation and standards. The 
standard also contains a provision, at Sec.  485.635(c)(1), that 
requires the CAH to have agreements or arrangements with one or more 
Medicare-participating providers or suppliers in order to furnish other 
services to its patients. We see the ``Medicare-participating'' 
modifying provision as an impediment to the type of agreements that 
CAHs may now have with distant-site telemedicine entities under this 
final rule. Since these entities are not considered Medicare-
participating providers or suppliers by CMS, we needed to make an 
exception to the requirement at Sec.  485.635(c)(1). Therefore, in this 
final rule, we are adding a new paragraph at Sec.  485.635(c)(5) to 
provide an exception to this ``Medicare-participating'' requirement for 
telemedicine entities in cases where a written agreement exists between 
a CAH and such entity.
    We believe that the combination of the new requirements, as 
finalized here, and the existing requirements cited above and in the 
final requirements, which place responsibility on hospitals and CAHs to 
ensure that contracted services fully enable them to meet the CoPs, 
will allow hospitals and CAHs to make full use of the telemedicine 
services offered by non-hospital telemedicine entities without 
duplicating the credentialing and privileging process. This final rule 
will now allow hospitals and CAHs to take advantage of these 
streamlined credentialing and privileging options when using the 
telemedicine services of other Medicare-participating hospitals, non-
Medicare-participating telemedicine entities, or a combination of both 
types of service providers. And with these new requirements dually 
aimed at increasing patient access to care and reducing the regulatory 
burden on hospitals and CAHs, CMS believes that the potential of 
telemedicine can be more fully realized while still maintaining 
essential health and safety protections.
    Comment: A number of commenters stated that practitioner-to-
practitioner ``tele-emergency'' video communications should not require 
credentialing and privileging of the distant-site practitioner. Another 
commenter requested that CMS consider that full credentialing and 
privileging should not be required when telemedicine services are only 
consultative in nature. However, the commenter did not clarify what he 
or she meant by ``consultative'' services.
    Response: Any time services are provided to a patient in a hospital 
or CAH, the requirements regarding the credentialing and privileging of 
the practitioners providing the services would apply, whether such 
practitioners were onsite or available to the patient through 
telemedicine services.
    Regarding ``consultative'' services as mentioned by the commenter, 
it is important to distinguish between informal consultation among 
practitioners (traditionally known as a ``curbside consult''), and the 
furnishing of professional consultation services, which would include 
providing medical diagnosis and treatment recommendations to patients 
after a formal request for such services by the practitioner 
responsible for patient's care. The CMS privileging requirements do not 
apply in instances where, for example, the attending physician of 
record seeks informal advice from another physician(s) by whatever 
communications media the physicians choose to use. The physician whose 
advice is being sought is not providing clinical services to the 
patient, but is merely rendering an informal opinion on the patients' 
condition to the patient's attending physician, who may or may not make 
use of the opinion when treating the patient. Such discussions between 
medical professionals occur on a routine basis in hospitals across the 
nation and do not require that the practitioners involved be privileged 
at the same hospital in order for this exchange of medical opinions to 
take place; in fact, we believe such communications may promote safer, 
more effective care for patients. Only the attending physician, who is 
providing clinical services to the patient, would need to be privileged 
by the hospital or CAH to provide such services. However, a formal 
consult provided by a specialty or other type of practitioner, where 
the hospital or CAH patient receives clinical services from the 
specialty practitioner after the patient's attending physician requests 
such services be provided (either simultaneously as is often the case 
with teleICU services, or non-simultaneously as may be the case with 
many teleradiology services), would require that the practitioner is 
privileged to do so at the hospital or CAH where the patient is 
located.
    Comment: One commenter stated that to further reduce burden, we 
should consider a ``contract'' approach to credentialing and 
privileging for telemedicine services, particularly for consultations 
requested by referring providers. Some commenters stated that such 
agreements or contracts, which essentially allow for credentialing and 
privileging by proxy, leave hospitals vulnerable to legal liabilities 
and risks and, therefore, should be prohibited under this rule. Another 
commenter suggested that, with regard to legal risks and liabilities, 
mandatory language addressing these issues should be required within 
the written agreements between distant-site hospitals and the hospital 
or CAH where the patient receives the services.
    Response: The requirements, as proposed, are aimed at reducing the 
telemedicine credentialing and privileging burden for small hospitals 
and CAHs by specifically allowing for contracts or, as we refer to 
them, ``agreements,'' between a distant-site hospital or telemedicine 
entity providing the telemedicine services and a hospital or CAH that 
uses these services for the benefit of its patients. In these 
agreements, it is the responsibility of the hospital or CAH using the 
services to ensure that the specifics of

[[Page 25555]]

the proposed requirements in this rule are explicitly laid out before 
entering into such an arrangement. Along these lines, we have corrected 
an oversight in the proposed rule and have revised the requirements in 
this final rule to clarify that these agreements must be ``written.'' 
It has always been the intent of this rule to allow for hospitals and 
CAHs to have the option of credentialing and privileging the distant-
site telemedicine practitioners using the traditional process. 
Hospitals and CAHs electing to use the traditional credentialing and 
privileging process must not be compelled by a distant-site 
telemedicine hospital (or distant-site telemedicine entity) to enter 
into an agreement that requires the use of the more streamlined 
approach as outlined here.
    Regarding the legal risks and liabilities of such agreements, the 
governing body of each individual hospital and CAH must weigh the risks 
and benefits of opting for this more streamlined process of 
credentialing and privileging telemedicine practitioners. We understand 
that there are many complex legal issues, including issues of 
liability, inherent to contracts and agreements between institutions. 
However, we believe that these issues are beyond the scope of this 
rule, and that any relevant legal issues must be worked out between the 
parties entering into the agreements in accordance with other laws and 
regulations governing such contracts or agreements.
    Comment: One commenter cited Sec.  482.12(b), under the ``Exercise 
of rights'' standard in the Patients Rights CoP, to state that the rule 
must contain language that requires the hospital or CAH to inform the 
patient about the use of telemedicine services for diagnostic care, so 
that the patient (or the patient's representative as allowed under 
State law) may make an informed decision about whether to accept or 
decline care provided in this way. The commenter believes that the 
patient's informed consent must be obtained by the hospital or CAH 
before it makes use of the telemedicine services.
    Response: We respectfully disagree with the commenter. In 
accordance with 42 CFR 482.24(c)(2)(v), the medical staff generally 
specifies procedures and treatments, in addition to those required by 
applicable Federal or State law, that require informed consent. As long 
as the telemedicine practitioner is performing his or her duties within 
the privileges granted by the hospital or CAH, there is no difference 
between distant-site practitioners and in-house or on-site 
practitioners in this regard. If they provide treatment that, under 
medical staff policy, requires informed consent, then this consent must 
be obtained, regardless of whether the treatment is furnished using 
telemedicine or not. Likewise, if, as is typical, hospital medical 
staff or CAH professional staff policies do not require the patient's 
informed consent in order for an on-site radiologist to interpret an x-
ray or CT scan that had been performed on the patient, then consent 
also would not be required when a distant-site telemedicine 
radiologist, who is privileged by the hospital or CAH to interpret such 
diagnostic radiological tests, performs the same services.
    Comment: One commenter expressed concern that there is no incentive 
for a distant-site hospital to provide these services for independent 
physician groups without corporate affiliation, even if they happen to 
be on the distant-site hospital medical staff.
    Response: While it is not clear to whom this comment is referring 
(``* * * independent physician groups without corporate affiliation, 
even if `they' happen to be on the distant-site hospital medical staff 
* * *''), the intent of this rule is not to provide business incentives 
for the provision of telemedicine services (as we believe they exist 
already), but to provide a more streamlined process for credentialing 
and privileging telemedicine practitioners that would be more efficient 
and less burdensome for all of the hospitals, CAHs, and distant-site 
hospitals involved in this process. We believe that by allowing for 
such an optional process, the incentives for distant-site hospitals to 
provide telemedicine services and for hospitals and CAHs to make use of 
these services will not diminish, but will greatly increase. 
Ultimately, we believe this will lead to even greater patient access to 
timely care that might not otherwise be available.
    Comment: A commenter questioned the long-run sustainability of 
increased workload associated with telemedicine (both at the patient-
site and at the distant-site facility), which, in the commenter's 
opinion, seems inevitable. The commenter also questioned whether our 
revisions would meet quality of care objectives within the commenter's 
facility.
    Response: The goal of this proposed rule is to ensure that all 
patients have access to quality care in their communities. We believe 
that this rule provides the framework for such care. We also believe 
that providers and practitioners will continue to schedule patient 
visits and appropriately refer patients in such a manner as to not 
overwhelm either facility or its practitioners. We believe that this 
rule will increase patient access to specialty services and reduce 
burden on facilities and providers.
    Comment: One commenter believes that CMS should assess the impact 
of the final rulemaking on practitioners. A few commenters stated that 
these requirements will increase burden on practitioners, because they 
will experience significant downstream reporting requirements for 
purposes of medical licensure renewal.
    Response: It is not clear from the comments as to whom the 
commenters are referring with the term, ``practitioners.'' Assuming 
that the commenters means those physicians and practitioners who are 
providing telemedicine services, we do not believe that this rule will 
increase the burden of reporting requirements for license renewal any 
more than the traditional credentialing and privileging processes 
presently do.
    Comment: Two commenters expressed support for the proposed 
regulation and requested that it be expanded to include small hospitals 
under 100 beds, as opposed to just rural hospitals that are 
participating in a State-approved telemedicine program. One commenter 
expressed concern that community-based facilities, which are neither 
hospitals nor CAHs (such as rural health clinics and federally 
qualified health centers), are not included in this rule as patient-
site facilities. Another commenter requested that we expand the scope 
of the rule to all facilities regulated by Medicare.
    Response: We would like to thank the commenters for their support 
of the proposed rule. However, we would like to clarify that this rule 
applies to all Medicare-participating hospitals, regardless of facility 
size, as well as to all Medicare-participating CAHs. Rural health 
clinics and federally qualified health centers are subject to separate 
Medicare Conditions for Coverage that do not require credentialing and 
privileging of their physicians and practitioners, and thus there is no 
basis for extending this rule to those types of facilities. However, it 
should be noted that many insurers, including Medicare, may place 
limits or restrictions on their payment for telehealth services, 
depending on the location of the patient who receives those services.
    Comment: Two commenters stated their opposition to the proposed 
rule because they felt that it allowed privileging by proxy to which 
they are opposed. One commenter stated that the changes only invite 
misuse by hospital and CAH governing bodies seeking to sidestep medical 
staff decisions regarding credentialing and privileging

[[Page 25556]]

and to place direct economic pressure on hospital-based practitioners 
(with the threat of replacing them with distant-site practitioners). 
The commenter further stated that the changes will effectively remove 
the local medical staff from any obligation that they may have in 
determining the qualifications of each individual applying for 
privileges.
    Response: We respectfully disagree with the commenter. As we have 
stated previously, the requirements being finalized here are an option 
for hospitals and CAHs as they approach the credentialing and 
privileging process for telemedicine practitioners. Though we cannot 
estimate the numbers, we fully expect some hospitals and CAHs to 
continue credentialing and privileging telemedicine practitioners 
through the traditional process. Such decisions will have to be 
determined and agreed upon by each hospital and CAH, after the risks 
and benefits of each process are fully analyzed. Furthermore, since the 
practice of privileging by proxy has been common for TJC-accredited 
hospitals for several years now, there has been ample time for 
problems, such as the ones the commenter mentions, to come to light. We 
are not aware of any evidence that indicates these problems have arisen 
from this process.
    Comment: A few commenters expressed belief that some language we 
used throughout the proposed rule is ambiguous and confusing and 
suggested that the terms ``distant-site hospital'' and ``patient-site 
facility'' be used consistently. Another commenter requested that we 
use the terms ``distant site'' and ``originating site'' to ensure 
consistency among CMS publications and avoid confusion. Another 
commenter requested that we clarify the nomenclature within the 
regulation so the responsibilities of each facility are explicit.
    Response: In drafting the proposed rule, we gave much thought to 
the terms that we would use to describe, and distinguish between, the 
hospital that provides the telemedicine services and the hospital or 
CAH that receives the telemedicine services on behalf of its patients. 
We came to the conclusion that it would only be more confusing (for a 
number of reasons) to use the terms ``distant site'' and ``originating 
site,'' as they are contained in both the Act and the payment rules. 
First among these reasons is the fact that, under the Act, there are 
sites (for example, rural health clinics, federally qualified health 
centers, and physician and practitioner offices) that are defined as 
``originating,'' but which do not apply in the context of the hospital 
and CAH CoPs. Additionally, the Act applies restrictions to these 
originating sites for specific Medicare payment purposes, which have no 
bearing on the hospital and CAH CoPs.
    We also considered other terms, such as ``patient-site facility,'' 
but found them too vague and inappropriate as well. Upon final analysis 
and consideration, we decided that distant-site hospital was an 
appropriate term to describe those larger hospitals that provide 
telemedicine services to patients of smaller hospitals and CAHs.
    In considering which term to use for a hospital or CAH whose 
patients receive telemedicine services, it became readily apparent to 
us that the clarity of the language in the proposed requirements was 
best served if we continued to use the terms used throughout the 
current hospital and CAH CoPs to describe the facility to which the 
CoPs applied and to which a survey (through either the State agencies 
or the national accreditation organizations) for compliance with the 
CoPs would be performed. Put simply, the hospital would be referred to 
as the ``hospital'' and the CAH as the ``CAH.'' Any qualifying language 
preceding these terms might change the meaning and confuse which 
facility these CoPs applied. In some areas, we found it necessary to 
use qualifying phrases such as ``the distant-site hospital providing 
the telemedicine services'' and ``the hospital (or CAH) whose patients 
are receiving the telemedicine services.'' Therefore, we are finalizing 
these terms as proposed.
    Comment: One commenter requested that we define and distinguish the 
differences between telemedicine and telehealth.
    Response: In drafting this rule, we reviewed a variety of existing 
definitions of telemedicine and telehealth. The American Telemedicine 
Association states that ``videoconferencing, transmission of still 
images, e-health including patient portals, remote monitoring of vital 
signs, continuing medical education, and nursing call centers are all 
considered part of telemedicine and telehealth.'' Other organizations 
describe telemedicine as one part of a larger category of telehealth. 
The Institute of Medicine of the National Academy of Science defines 
telemedicine as ``the use of electronic information and communication 
technologies to provide and support health care when distance separates 
the participants.'' According to the California Telemedicine and 
eHealth Center, ``telehealth refers to a broader scope of services that 
includes telemedicine, but it also includes other services that can be 
provided remotely using communication technologies.'' And the federal 
Office for the Advancement of Telehealth, describes telehealth as 
``including telemedicine and a variety of other services.'' In 
addition, Section 1834(m) of the Social Security Act (the Act) 
addresses Medicare payment for ``telehealth services.'' In accordance 
with those statutory provisions, telehealth services are certain 
services provided by practitioners via a telecommunications system to 
patients of certain types of healthcare facilities (including hospitals 
and CAHs) and physician or practitioner offices that are located in 
rural areas.
    The consensus in the telemedicine/telehealth community appears to 
be that telemedicine refers to the provision of clinical services to 
patients by practitioners from a distance via electronic communications 
and that it is included under the broader scope of telehealth, while 
the statutory Medicare telehealth payment provisions are considerably 
narrower. At Sec.  1834(m) of the Act, telehealth services are defined 
as professional consultations, office visits, and office psychiatry 
services, and any additional service specified by the Secretary. Most 
significantly, the statute allows payment for services that are 
provided to patients in a variety of settings (otherwise known as 
``originating sites'' and which include physician or practitioner 
offices, CAHs, rural health clinics, and hospitals), but requires that 
all of these originating sites must be located in one of three areas: 
(1) An area that is designated as a rural health professional shortage 
area under section 332(a)(1)(A) of the Public Health Service Act (42 
U.S.C. 254e(a)(1)(A)); (2) in a county that is not included in a 
Metropolitan Statistical Area; or (3) from an entity that participates 
in a Federal telemedicine demonstration.
    However, for the purposes of this rule, we see telemedicine as 
encompassing the overall delivery of healthcare to the patient through 
the practice of patient assessment, diagnosis, treatment, consultation, 
transfer and interpretation of medical data, and patient education all 
via a telemedicine link (for example, audio, video, and data 
telecommunications as may be utilized by distant-site physicians and 
practitioners), and which is not restricted to only patients in rural 
areas of the nation. Therefore, in order to make clear that the 
credentialing and privileging provisions finalized here apply to all 
Medicare-participating hospitals and CAHs and not to the narrower 
subset of services and sites eligible for Medicare telehealth payment, 
we chose to use the term,

[[Page 25557]]

``telemedicine,'' throughout this rule instead of ``telehealth.''
    Comment: Two commenters stated that they do not support using the 
phrase ``hospital's patients.'' They stated that often individuals who 
are not registered patients make use of a rural hospital's telemedicine 
facilities without being registered patients. Two other commenters 
encouraged us to recognize and apply the proposed credentialing and 
privileging model to ``all types of patients.'' One commenter requested 
clarification of the word ``patient'' and suggests we further define 
that any reference to patient applies solely to inpatient services.
    Response: We are aware that individuals that are not patients 
sometimes make use of a rural hospital's or CAH's facilities and 
telemedicine equipment in order to effect what are essentially office 
visits with distant-site telemedicine practitioners. Since these 
individuals are not patients of the hospital or CAH, and the distant-
site telemedicine practitioners are not seeing them as patients of the 
hospital or CAH, the CoPs would not apply in these situations. This 
speaks directly to the other comments above requesting that these 
requirements be applied to all types of patients and, conversely, that 
we clarify that these requirements apply only to inpatients. Simply 
stated, the hospital and CAH CoPs are intended to ensure the health and 
safety of those patients, inpatients as well as outpatients, who are 
hospital and CAH patients.
    Comment: A commenter expressed concern that patient-site hospitals 
may not have staff with appropriate expertise that would allow them to 
evaluate credentialing and privileging information for specialists.
    Response: The proposed and final rules address the commenter's 
concern. Small hospitals and CAHs that believe they lack the expertise 
to perform credentialing and privileging for the telemedicine services 
of specialized practitioners already privileged at a distant-site 
hospital or telemedicine entity would have the option of relying upon 
the distant site's privileging process instead.
    Comment: A commenter questioned whether it is sufficient for a 
distant-site hospital to provide the information in an agreement with 
the partnering patient-site institution. The commenter asked if the 
distant-site hospital is expected to provide the patient-site hospital 
with detailed information that may be contained in the physician's 
credentialing file at the distant-site hospital.
    Response: We would expect the parties engaged in the agreement to 
determine, within the written details of the agreement or contract, how 
much information would need to be included and sent for each 
practitioner providing telemedicine services to the hospital or CAH. At 
the very least, as part of its agreement with the distant-site 
hospital, we would expect a hospital or CAH to have access to the 
complete credentialing and privileging file upon request for each 
practitioner who is covered by the agreement.
    Comment: We received a number of comments concerning the issue of 
State licensure and telemedicine practitioners. A few commenters stated 
that a telemedicine practitioner must be licensed in the State in which 
he or she is located as well as in any State(s) that he or she provides 
telemedicine services to patients. Other commenters asked for 
clarification on the term ``recognized'' as used in the proposed rule 
and asked if it was equivalent to the ``privilege to practice'' 
authority provided for by Nurse Licensure Compact States. A few 
commenters also stated that the licensure language was not clear and 
further stated that if it was intended that the requirements would 
allow for reciprocity agreements, endorsements, other compact 
arrangements, or situations where a State does not require local 
licensure, then the requirements should be amended to reflect this.
    Response: We appreciate the suggestions offered by commenters. 
However, we believe that the proposed licensure language provides 
enough flexibility to hospitals and CAHs so that they may address these 
issues in their required agreements with distant-site telemedicine 
hospitals and entities. In fact, our intention was that they should 
address such licensure issues in accordance with their respective State 
laws and regulations. We neither endorse nor prohibit licensure 
arrangements among States, which are mentioned above. Practitioners 
providing telemedicine services, as well as the distant-site hospitals 
and entities under whose auspices they provide these services, must be 
aware of the licensure laws in the States where they are located in 
addition to the laws, compacts, and arrangements of those States in 
which they look to provide their services to patients.
    CMS recognizes that practitioner licensure laws and regulations 
have traditionally been, and continue to be, the provenance of 
individual States, and we are not seeking to pre-empt State authority 
in this matter. We believe that the proposed requirements regarding 
State licensure leave room for the laws that exist today as well as any 
changes to these laws that may occur in the future, including any 
increase in the number of States that decide to engage in compacts, 
privilege to practice or reciprocity agreements, endorsements, and 
other arrangements regarding practitioner licensure. Therefore, we are 
finalizing this aspect of the requirements as proposed.

Critical Access Hospital (CAH) CoPs (Sec.  485.616 and Sec.  485.641)

    We proposed to make revisions to the CAH CoPs at Sec.  485.616, 
``Agreements,'' and Sec.  485.641, ``Periodic evaluation and quality 
assurance review.'' We specified in the proposed rule that the majority 
of the proposed revisions, particularly those which mirror the proposed 
hospital revisions, are found in the ``Agreements'' CoP, specifically 
Sec.  485.616(c). At Sec.  485.616(c), we proposed a new standard 
entitled, ``Agreements for credentialing and privileging of 
telemedicine physicians and practitioners.''
    The proposed telemedicine credentialing and privileging 
requirements for CAHs are modeled after the hospital requirements, with 
almost no differences in the regulatory language. Since the only 
existing requirements in the CAH CoPs specific to the responsibility of 
the governing body to grant medical staff privileges concerns surgical 
privileges for practitioners, we proposed to add language that follows 
the language in the hospital requirements at Sec.  482.12(a). This 
language delineates the responsibilities of the governing body for the 
professional staff privileging process.
    At Sec.  485.641(b)(4)(iv), which does not have an equivalent 
provision in the hospital CoPs, we proposed to make a minor change to 
the CAH CoPs here. We proposed to add a new provision that would allow 
the distant-site hospital to evaluate the quality and appropriateness 
of the diagnosis and treatment furnished by its own staff when 
providing telemedicine services to the CAH. This proposed change would 
add distant-site hospitals to the three other entities already allowed 
to perform this function under the existing regulations.
    Comment: One commenter noted that we use slightly different 
language in the requirements for CAHs than we do for the hospital 
requirements, and stated that we do not discuss the reasons for the 
differences in the preamble to the proposed rule. The commenter noted 
that we state at Sec.  485.616(c)(2) that the CAH's ``governing body or 
responsible individual may choose to rely upon the credentialing and 
privileging decisions

[[Page 25558]]

made by the governing body of the distant-site hospital regarding 
individual distant-site physicians or practitioners.''
    Response: We thank the commenters for pointing out the discrepancy 
between the regulatory language for hospitals and that for CAHs in this 
instance. We have revised the hospital language to be consistent with 
that for CAHs.

III. Provisions of the Final Rule

    Based on public comment and our own internal discussions, we are 
adding new provisions to this final rule that will apply to the 
credentialing and privileging process and the agreements between 
hospitals and CAHs and non-hospital, distant-site telemedicine entities 
that provide telemedicine services (Sec.  482.12(a)(9) and Sec.  
482.22(a)(4) for hospitals; Sec.  485.616(c)(3) and Sec.  485.616(c)(4) 
for CAHs). These new provisions will require the governing body of the 
hospital (or the CAH's governing body or responsible individual), 
through its written agreement with the distant-site telemedicine 
entity, to ensure that the distant-site telemedicine entity, acting as 
a contractor of services, furnishes its services in a manner that 
enables the hospital (or CAH) to comply with all applicable conditions 
of participation and standards for the contracted services, including, 
but not limited to, the credentialing and privileging requirements 
regarding its physicians and practitioners providing telemedicine 
services.
    Essentially, the new provisions will allow for the governing body 
of the hospital (or the CAH's governing body or responsible individual) 
to rely upon the credentialing and privileging decisions made by the 
distant-site telemedicine entity when making its own decisions on 
privileges for the individual distant-site physicians and practitioners 
providing such services, if the hospital's governing body (or the CAH's 
governing body or responsible individual) ensures, through its written 
agreement with the distant-site telemedicine entity, that the distant-
site telemedicine entity's medical staff credentialing and privileging 
processes and standards meet or exceed the standards at Sec.  
482.12(a)(1) through Sec.  482.12(a)(7) and Sec.  482.22(a)(1) through 
Sec.  482.22(a)(2) for hospitals, and at Sec.  485.616(c)(1)(i) through 
Sec.  485.616(c)(1)(vii) for CAHs. Additionally, the hospital's 
governing body (or the CAH's governing body or responsible individual) 
must ensure that the distant-site telemedicine entity, through a 
written agreement, meets three other provisions finalized here (and 
similar to those proposed and finalized here for agreements between 
hospitals/CAHs and distant-site hospitals providing telemedicine 
services).
    Accordingly, we have made revisions to Sec.  482.22(c)(6) and Sec.  
485.641(b)(4) to reference these new provisions pertaining to distant-
site telemedicine entities as finalized in this rule.
    Additionally, we have made a revision to Sec.  485.635(c). This 
standard currently requires a CAH to have agreements or arrangements 
with one or more Medicare-participating providers or suppliers in order 
to furnish other services to its patients. We saw that as an impediment 
to the agreements that CAHs may have with distant-site telemedicine 
entities under this final rule. Since these entities do not participate 
in Medicare, we needed to make an exception to the requirement at Sec.  
485.635(c)(1). We have added a new paragraph at Sec.  485.635(c)(5) to 
provide an exception to this requirement in cases where a written 
agreement exists between a CAH and a distant-site telemedicine entity 
for the entity's distant-site physicians and practitioners to provide 
telemedicine services to the CAH's patients.
    In this final rule, we have made two significant clarifying 
revisions to the language of the proposed rule.
    In the requirements for both hospitals and CAHs pertaining to the 
agreement with a distant-site hospital providing telemedicine services, 
we have corrected an oversight in the proposed rule and have revised 
the requirements in this final rule to clarify that these agreements or 
contracts must be written.
    We have also revised the hospital language to be more consistent 
with that for CAHs, where we now state that the hospital's governing 
body may choose to have its medical staff ``rely upon the credentialing 
and privileging decisions made by the governing body of the distant-
site hospital regarding individual distant-site physicians or 
practitioners.''
    Finally, we have made a few minor clarifying revisions to the 
proposed rule in those places where we found inconsistencies in 
regulatory language and/or instances where we believe the language was 
not as clear as it should have originally been.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We solicited public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. ICRs Regarding Condition of Participation: Governing Body (Sec.  
482.12)

    Section 482.12(a)(8) requires the governing body of a hospital to 
ensure that, when telemedicine services are furnished to the hospital's 
patients through an agreement with a distant-site hospital, the 
agreement is written and specifies that it is the responsibility of the 
governing body of the distant-site hospital to meet the requirements in 
paragraphs (1) through (7) of this section with regard to its 
physicians and practitioners providing telemedicine services. The 
burden associated with this requirement is the time and effort 
necessary for a hospital's governing body to develop, review, and 
update as necessary the agreement with a distant-site hospital. We 
estimate that 4,860 hospitals (not including 1,314 CAHs) must develop 
the aforementioned written agreement. We also estimate that the initial 
development of the agreement will take 1,440 minutes at an estimated 
cost of $1,996. Assuming at most an annual update, the review will take 
360 minutes at an estimated cost of $516. The total cost associated 
with this requirement is $2,512.
    Section 482.12(a)(9) requires the governing body of a hospital to 
ensure that, when telemedicine services are furnished to the hospital's 
patients through an agreement with a distant-site telemedicine entity, 
the agreement is written and specifies that the distant-site 
telemedicine entity is a contractor of services to the hospital and as 
such, in accordance with Sec.  482.12(e), furnishes services that 
permit the hospital to comply with all applicable conditions of 
participation and standards for the contracted services,

[[Page 25559]]

including, but not limited to, the requirements in paragraphs (a)(1) 
through (a)(7) of this section with regard to its physicians and 
practitioners providing telemedicine services. The burden associated 
with this requirement is the time and effort necessary for a hospital's 
governing body to develop, review, and update as necessary the 
agreement with a distant-site telemedicine entity. While this 
requirement is subject to the PRA, the associated burden is accounted 
for in our discussion of Sec.  482.12(a)(8).

B. ICRs Regarding Condition of Participation: Medical Staff (Sec.  
482.22)

    Section 482.22(a)(3) states that when telemedicine services are 
furnished to a hospital's patients through an agreement with a distant-
site hospital, the governing body of the hospital whose patients are 
receiving the telemedicine services may choose to have its medical 
staff rely upon the credentialing and privileging decisions made by the 
distant-site hospital when making recommendations on privileges for the 
individual physicians and practitioners providing such services. To do 
this, a hospital's governing body must ensure that all of the 
provisions listed at Sec.  482.22(a)(3)(i) through (iv) are met. 
Specifically, Sec.  482.22(a)(3)(iv) contains a third-party disclosure 
requirement. Section 482.22(a)(3)(iv) requires that with respect to a 
distant-site physician or practitioner, who holds current privileges at 
the hospital whose patients are receiving the telemedicine services, 
the hospital has evidence of an internal review of the distant-site 
physician's or practitioner's performance of these privileges and sends 
the distant-site hospital such information for use in the periodic 
appraisal of the distant-site physician or practitioner. At a minimum, 
this information must include all adverse events that result from the 
telemedicine services provided by the distant-site physician or 
practitioner to the hospital's patients and all complaints the hospital 
has received about the distant-site physician or practitioner.
    The burden associated with this third-party disclosure requirement 
is the time and effort necessary for a hospital to send evidence of a 
distant-site physician's or practitioner's performance review to the 
distant-site hospital with which it has an agreement for providing 
telemedicine services. We estimate 4,860 hospitals (not including 1,314 
CAHs) must comply with this requirement. We estimate that each 
disclosure will take 60 minutes and that there will be approximately 32 
annual disclosures. The estimated cost associated with this requirement 
is $1,088.
    Section 482.22(a)(4) states that when telemedicine services are 
furnished to the hospital's patients through an agreement with a 
distant-site telemedicine entity, the governing body of the hospital 
whose patients are receiving the telemedicine services may choose, in 
lieu of the requirements in paragraphs (a)(1) and (a)(2) of this 
section, to have its medical staff rely upon the credentialing and 
privileging decisions made by the distant-site telemedicine entity when 
making recommendations on privileges for the individual distant-site 
physicians and practitioners providing such services, if the hospital's 
governing body ensures, through its written agreement with the distant-
site telemedicine entity, that the distant-site telemedicine entity 
furnishes services that, in accordance with Sec.  482.12(e), permit the 
hospital to comply with all applicable conditions of participation and 
standards for the contracted services. To do this, a hospital's 
governing body must ensure that all of the provisions listed at Sec.  
482.22(a)(4)(i) through (iv) are met. Specifically, Sec.  
482.22(a)(4)(iv) contains a third-party disclosure requirement. Section 
482.22(a)(4)(iv) states that with respect to a distant-site physician 
or practitioner, who hold current privileges at the hospital whose 
patients are receiving the telemedicine services, the hospital has 
evidence of an internal review of the distant-site physician's or 
practitioner's performance and sends the distant-site telemedicine 
entity such information for use in the periodic appraisal of the 
distant-site physician or practitioner. At a minimum, this information 
must include all adverse events that result from the telemedicine 
services provided to the hospital's patients by the distant-site 
physician or practitioner and all complaints the hospital has received 
about the distant-site physician or practitioner. While this 
requirement is subject to the PRA, the associated burden is accounted 
for in our discussion of Sec.  482.22(a)(3).

C. ICRs Regarding Condition of Participation: Agreements (Sec.  
485.616)

    Section 485.616(c)(1) states that the governing body of the CAH 
must ensure that, when telemedicine services are furnished to the CAH's 
patients through an agreement with a distant-site hospital, the 
agreement is written and specifies that it is the responsibility of the 
governing body of the distant-site hospital to meet the requirements 
listed at Sec.  485.616(c)(1)(i) through (vii) and Sec.  485.616(c)(2). 
The burden associated with this requirement is the time and effort 
necessary for a CAH's governing body to develop, review, and update as 
necessary the agreement with a distant-site hospital. We estimate that 
1,314 CAHs must develop and review the aforementioned written 
agreement. We also estimate that development of the agreement will take 
1,440 minutes initially and, assuming at most an annual update, the 
review will take 360 minutes annually. The total cost associated with 
this requirement is $2,512.
    Section 485.616(c)(2) states that when telemedicine services are 
furnished to the CAH's patients through an agreement with a distant-
site hospital, the CAH's governing body or responsible individual may 
choose to rely upon the credentialing and privileging decisions made by 
the governing body of the distant-site hospital for individual distant-
site physicians or practitioners, if the CAH's governing body or 
responsible individual ensures that all of the provisions listed at 
Sec.  485.616(c)(2)(i) through (iv) are met. The burden associated with 
this third-party disclosure requirement at Sec.  485.616(c)(2)(iv) is 
the time and effort necessary for a CAH to send evidence of a distant-
site physician's or practitioner's performance review to the distant-
site hospital with which it has an agreement for providing telemedicine 
services. We estimate 1,314 CAHs must comply with this requirement. We 
estimate that each disclosure will take 60 minutes and that there will 
be approximately 32 annual disclosures. The estimated cost associated 
with this requirement is $1,088.
    Section 485.616(c)(3) states that the governing body of the CAH 
must ensure that, when telemedicine services are furnished to the CAH's 
patients through an agreement with a distant-site telemedicine entity, 
the agreement is written and specifies that the distant-site 
telemedicine entity is a contractor of services to the CAH and as such, 
in accordance with Sec.  485.635(c)(4)(ii), furnishes services that 
enable the CAH to comply with all applicable conditions of 
participation and standards for the contracted services, including, but 
not limited to, the requirements in this section with regard to its 
physicians and practitioners providing telemedicine services.
    The burden associated with this requirement is the time and effort 
necessary for a CAH's governing body to develop, review, and update as 
necessary the agreement with a distant-site telemedicine entity. We 
estimate that 1,314 CAHs must develop and review the aforementioned 
written

[[Page 25560]]

agreement. We also estimate that development of the agreement will take 
1,440 minutes (that is, 24 hours) initially and, assuming at most an 
annual update, the review will take 360 minutes (six hours) annually. 
The total cost associated with this requirement is $2,512.
    Section 485.616(c)(4) states that when telemedicine services are 
furnished to the CAH's patients through an agreement with a distant-
site telemedicine entity, the CAH's governing body or responsible 
individual may choose to rely upon the credentialing and privileging 
decisions made by the governing body of the distant-site telemedicine 
entity regarding individual distant-site physicians or practitioners. 
The CAH's governing body or responsible individual must ensure, through 
its written agreement with the distant-site telemedicine entity, that 
all of the provisions listed at Sec.  485.616(c)(4)(i) through (iv) are 
met. The burden associated with this third-party disclosure requirement 
at Sec.  485.616(c)(4)(iv) is the time and effort necessary for a CAH 
to send evidence of a distant-site physician's or practitioner's 
performance review to the distant-site telemedicine entity with which 
it has an agreement for providing telemedicine services. While this 
requirement is subject to the PRA, the associated burden is accounted 
for in our discussion of Sec.  485.616(c)(2).

                                             Table 1--Annual Reporting, Recordkeeping and Disclosure Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Hourly       Total
                                                                                 Burden per     Total    labor cost  labor cost     Total
      Regulation section(s)          OMB Control No.    Respondents   Responses    response    annual        of          of        capital/   Total cost
                                                                                   (hours)     burden     reporting   reporting  maintenance      ($)
                                                                                               (hours)       ($)         ($)      costs  ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   482.12(a)(8) and (9).....  0938-New............        4,860       4,860          24     116,640          **   9,700,560            0   9,700,560
                                  ....................        4,860       4,860           6      29,160          **   2,507,760            0   2,507,760
Sec.   482.22(a)(3) and (4).....  0938-New............        4,860     155,520           1     155,520          34   5,287,680            0   5,287,680
Sec.   485.616(c)(1) and (3)....  0938-New............        1,314       1,314          24      31,536          **   2,622,744            0   2,622,744
                                  ....................        1,314       1,314           6       7,884          **     678,024            0     678,024
Sec.   485.616(c)(2) and (4)....  0938-New............        1,314      42,048           1      42,048          34   1,429,632  ...........   1,429,632
                                                       -------------------------------------------------------------------------------------------------
    Total.......................  ....................        6,174     209,916  ..........     382,788  ..........  ..........  ...........  22,226,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
** Wage rates vary by level of staff involved in complying with the information collection request (ICR). The wage rates associated with the
  aforementioned information collection requirements are listed in Tables 2-7 in the regulatory impact analysis of this final rule.

V. Regulatory Impact Analysis

A. Statement of Need

    Currently, a hospital or CAH receiving telemedicine services must 
go through a burdensome credentialing and privileging process for each 
physician and practitioner who will be providing telemedicine services 
to its patients. In the past, under the Joint Commission's (TJC) 
statutory deeming authority, hospitals that were accredited by TJC were 
deemed to have met the CMS credentialing and privileging requirements. 
TJC's ``privileging by proxy'' standards allowed for one Joint 
Commission-accredited facility to accept the privileging decisions of 
another Joint Commission-accredited facility. TJC has been statutorily 
required to meet or exceed our requirements regarding credentialing and 
privileging since July 15, 2010.
    This final rule will revise the conditions of participation (CoPs) 
for both hospitals and critical access hospitals (CAHs) and will 
implement a new credentialing and privileging process for physicians 
and practitioners furnishing telemedicine services. Additionally, and 
perhaps more significantly, failure to publish this final rule will 
place undue hardship and financial burden on those hospitals and CAHs 
who have been credentialing and privileging telemedicine practitioners 
under TJC's ``privileging by proxy'' model. These hospitals and CAHs 
will have to take on the burden of credentialing and privileging a 
significant number of telemedicine practitioners in a relatively short 
period of time or they will have to consider canceling their 
telemedicine services. Cancellation of telemedicine services by small 
hospitals and CAHs will drastically reduce access to needed specialty 
services for a great number of patients, many of whom are Medicare 
beneficiaries.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(February 2, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
This rule is not an economically significant rule and does not impose 
significant costs. The benefits of finalizing this rule greatly 
outweigh any costs imposed. Conversely, the negative impacts on overall 
patient health and safety as well as on the operating costs of 
individual hospitals and CAHs were this rule not to be finalized would 
be significant compared to the minimal cost imposed by finalizing it 
here. Accordingly, we have prepared a regulatory impact analysis, which 
to the best of our ability, presents the costs and benefits of the 
rulemaking.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100

[[Page 25561]]

million or more in any 1 year). The RFA requires agencies to analyze 
options for regulatory relief of small businesses, if a rule has a 
significant impact on a substantial number of small entities. For 
purposes of the RFA, we estimate that the great majority of hospitals, 
including CAHs, are small entities as that term is used in the RFA. 
Individuals and States are not included in the definition of a small 
entity. While we do not believe that this final rule will have a 
significant impact on small entities, we do believe that this rule will 
have a positive impact by providing immediate regulatory relief for 
these small entities and will negatively impact them if not finalized 
here. Therefore, we are voluntarily preparing a Regulatory Flexibility 
Analysis.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has fewer than 100 beds. This rule will not have a 
significant impact on small rural hospitals as it is intended to 
relieve the burden on hospitals, particularly on small rural hospitals 
and CAHs, and to reduce or eliminate the impact of the current 
regulatory impediments to efficient operation and patient access to 
essential healthcare services. Therefore, the Secretary has determined 
that this final rule will not have a significant negative impact on the 
operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2011, that 
threshold is approximately $136 million. This rule does not contain 
mandates that will impose spending costs on State, local, or tribal 
governments in the aggregate, or by the private sector, of $136 
million.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This final rule will not have a substantial direct effect 
on State or local governments, preempt State laws, or otherwise have a 
Federalism implication.

C. Anticipated Effects

1. Effects on Hospitals and Critical Access Hospitals (CAHs)
    We estimate the costs to hospitals and CAHs to implement this final 
rule with comment period to be minimal, particularly when weighed 
against the significant benefits that the rule would bring about by 
reducing the regulatory burden for hospitals and CAHs. The major costs 
are related to developing the agreement between the distant-site 
hospital or distant-site telemedicine entity and the hospital or CAH at 
which patients who receive the telemedicine services are located. Many 
hospitals and CAHs may already have such telemedicine service 
agreements in place and therefore would not incur the initial costs of 
developing such an agreement.
    Our figures, as of March 31, 2010, indicate that there were 4,860 
hospitals and 1,314 CAHs (for a total of 6,174) participating in 
Medicare in the United States. However, we have no way of determining 
an exact number on which of these hospitals provide telemedicine 
services and which of these hospitals and CAHs receive telemedicine 
services, nor can we determine how many hospitals and CAHs already have 
telemedicine agreements. We do not have any reliable figures on the 
number of non-hospital, distant-site telemedicine entities that provide 
telemedicine services to hospitals and CAHs. Accordingly, we have based 
our cost estimates on the higher costs that would be incurred if every 
hospital and CAH in the United States was required to develop an 
agreement and review and update it annually. We prepared the cost 
estimates for hospitals and CAHs separately. However, all sides of this 
equation will require the initial services of a hospital or CAH 
attorney at an average of $86/hour; a hospital or CAH chief of the 
medical/professional staff (a physician) at an average of $103/hour; 
and a hospital or CAH administrator at an average of $69/hour. For the 
third-party disclosure requirements, we also prepared the cost 
estimates for hospitals and CAHs separately, though both will require 
the annual services of a medical staff credentialing manager or a 
medical staff coordinator at an average of $34/hour. Our salary figures 
are the most recent wage estimates from the Bureau of Labor Statistics 
(http://www.bls.gov/home.htm) with 33% added to the hourly wage to 
account for benefits. Our estimates of time and cost for each aspect of 
the agreement (development and initial cost, and annual review), as 
well as for the third-party disclosure, is as follows:

 Table 2--Information Collection Requirements for a Hospital To Develop an Agreement for Telemedicine Services:
                                                  Initial Cost
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Cost per
                   Individual                       Hourly wage        hours        individual      Total cost
----------------------------------------------------------------------------------------------------------------
Attorney........................................             $86              12          $1,032  ..............
Physician.......................................             103               4             412          $1,996
Hospital Administrator..........................              69               8             552  ..............
----------------------------------------------------------------------------------------------------------------


 Table 3--Information Collection Requirements for a Hospital To Review and Update an Agreement for Telemedicine
                                              Services: Annual Cost
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Cost per
                   Individual                       Hourly wage        hours        individual      Total cost
----------------------------------------------------------------------------------------------------------------
Attorney........................................             $86               2            $172  ..............
Physician.......................................             103               2             206            $516
Hospital Administrator..........................              69               2             138  ..............
----------------------------------------------------------------------------------------------------------------


[[Page 25562]]

    Therefore, we estimate the total initial cost to develop the 
agreement for all 4,860 hospitals to be $9.7 million. The annual cost 
to review agreements for all hospitals is estimated at $2.5 million.

    Table 4--Information Collection Requirements for a CAH To Develop an Agreement for Telemedicine Services:
                                                  Initial Cost
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Cost per
                   Individual                       Hourly wage        hours        individual      Total cost
----------------------------------------------------------------------------------------------------------------
Attorney........................................             $86              12          $1,032  ..............
Physician.......................................             103               4             412          $1,996
CAH Administrator...............................              69               8             552  ..............
----------------------------------------------------------------------------------------------------------------


    Table 5--Information Collection Requirements for a CAH To Review and Update an Agreement for Telemedicine
                                              Services: Annual Cost
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Cost per
                   Individual                       Hourly wage        hours        individual      Total cost
----------------------------------------------------------------------------------------------------------------
Attorney........................................             $86               2            $172  ..............
Physician.......................................             103               2             206            $516
Hospital Administrator..........................              69               2             138  ..............
----------------------------------------------------------------------------------------------------------------

    Therefore, we estimate the total initial cost to develop the 
agreement for all 1,314 CAHs to be $2.6 million. The annual cost to 
review agreements for all CAHs is estimated at $678,024.

 Table 6--Information Collection Requirements for a Hospital To Prepare and Send Individual Performance Reviews
                         for Telemedicine Services (Third-Party Disclosure): Annual Cost
----------------------------------------------------------------------------------------------------------------
                                                                                     Number of
                           Individual                               Hourly wage        hours        Total cost
----------------------------------------------------------------------------------------------------------------
Medical Staff Coordinator or Medical Staff Credentialing Manager             $34              32          $1,088
----------------------------------------------------------------------------------------------------------------

    Therefore, we estimate the total annual cost to prepare and send 
individual performance reviews for telemedicine services (third-party 
disclosure) for all 4,860 hospitals to be $5.3 million.

  Table 7--Information Collection Requirements for a CAH To Prepare and Send Individual Performance Reviews for
                           Telemedicine Services (Third-Party Disclosure): Annual Cost
----------------------------------------------------------------------------------------------------------------
                                                                                     Number of
                           Individual                               Hourly wage        hours        Total cost
----------------------------------------------------------------------------------------------------------------
Medical Staff Coordinator or Medical Staff Credentialing Manager             $34              32          $1,088
----------------------------------------------------------------------------------------------------------------

    Therefore, we estimate the total annual cost to prepare and send 
individual performance reviews for telemedicine services (third-party 
disclosure) for all 1,314 CAHs to be $1.4 million.
    The total cost of the information collection requirements for both 
hospitals and CAHs is estimated to be $22.2 million.

D. Conclusion

    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 482

    Grant programs--health, Hospitals, Medicaid, Medicare, Reporting 
and recordkeeping requirements.

42 CFR Part 485

    Grant programs--health, Health facilities, Medicaid, Medicare, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

0
1. The authority citation for part 482 continues to read as follows:

    Authority:  Secs. 1102, 1871 and 1881 of the Social Security Act 
(42 U.S.C. 1302, 1395hh, and 1395rr), unless otherwise noted.

Subpart B--Administration

0
2. Section 482.12 is amended by adding new paragraphs (a)(8) and (a)(9) 
to read as follows:


Sec.  482.12  Condition of participation: Governing body.

* * * * *
    (a) * * *

[[Page 25563]]

    (8) Ensure that, when telemedicine services are furnished to the 
hospital's patients through an agreement with a distant-site hospital, 
the agreement is written and that it specifies that it is the 
responsibility of the governing body of the distant-site hospital to 
meet the requirements in paragraphs (a)(1) through (a)(7) of this 
section with regard to the distant-site hospital's physicians and 
practitioners providing telemedicine services. The governing body of 
the hospital whose patients are receiving the telemedicine services 
may, in accordance with Sec.  482.22(a)(3) of this part, grant 
privileges based on its medical staff recommendations that rely on 
information provided by the distant-site hospital.
    (9) Ensure that when telemedicine services are furnished to the 
hospital's patients through an agreement with a distant-site 
telemedicine entity, the written agreement specifies that the distant-
site telemedicine entity is a contractor of services to the hospital 
and as such, in accordance with Sec.  482.12(e), furnishes the 
contracted services in a manner that permits the hospital to comply 
with all applicable conditions of participation for the contracted 
services, including, but not limited to, the requirements in paragraphs 
(a)(1) through (a)(7) of this section with regard to the distant-site 
telemedicine entity's physicians and practitioners providing 
telemedicine services. The governing body of the hospital whose 
patients are receiving the telemedicine services may, in accordance 
with Sec.  482.22(a)(4) of this part, grant privileges to physicians 
and practitioners employed by the distant-site telemedicine entity 
based on such hospital's medical staff recommendations; such staff 
recommendations may rely on information provided by the distant-site 
telemedicine entity.
* * * * *

Subpart C--Basic Hospital Functions

0
3. Section 482.22 is amended by--
0
A. Adding new paragraphs (a)(3) and (a)(4).
0
B. Revising paragraph (c)(6).
    The addition and revision read as follows:


Sec.  482.22  Condition of participation: Medical staff.

* * * * *
    (a) * * *
    (3) When telemedicine services are furnished to the hospital's 
patients through an agreement with a distant-site hospital, the 
governing body of the hospital whose patients are receiving the 
telemedicine services may choose, in lieu of the requirements in 
paragraphs (a)(1) and (a)(2) of this section, to have its medical staff 
rely upon the credentialing and privileging decisions made by the 
distant-site hospital when making recommendations on privileges for the 
individual distant-site physicians and practitioners providing such 
services, if the hospital's governing body ensures, through its written 
agreement with the distant-site hospital, that all of the following 
provisions are met:
    (i) The distant-site hospital providing the telemedicine services 
is a Medicare-participating hospital.
    (ii) The individual distant-site physician or practitioner is 
privileged at the distant-site hospital providing the telemedicine 
services, which provides a current list of the distant-site physician's 
or practitioner's privileges at the distant-site hospital.
    (iii) The individual distant-site physician or practitioner holds a 
license issued or recognized by the State in which the hospital whose 
patients are receiving the telemedicine services is located.
    (iv) With respect to a distant-site physician or practitioner, who 
holds current privileges at the hospital whose patients are receiving 
the telemedicine services, the hospital has evidence of an internal 
review of the distant-site physician's or practitioner's performance of 
these privileges and sends the distant-site hospital such performance 
information for use in the periodic appraisal of the distant-site 
physician or practitioner. At a minimum, this information must include 
all adverse events that result from the telemedicine services provided 
by the distant-site physician or practitioner to the hospital's 
patients and all complaints the hospital has received about the 
distant-site physician or practitioner.
    (4) When telemedicine services are furnished to the hospital's 
patients through an agreement with a distant-site telemedicine entity, 
the governing body of the hospital whose patients are receiving the 
telemedicine services may choose, in lieu of the requirements in 
paragraphs (a)(1) and (a)(2) of this section, to have its medical staff 
rely upon the credentialing and privileging decisions made by the 
distant-site telemedicine entity when making recommendations on 
privileges for the individual distant-site physicians and practitioners 
providing such services, if the hospital's governing body ensures, 
through its written agreement with the distant-site telemedicine 
entity, that the distant-site telemedicine entity furnishes services 
that, in accordance with Sec.  482.12(e), permit the hospital to comply 
with all applicable conditions of participation for the contracted 
services. The hospital's governing body must also ensure, through its 
written agreement with the distant-site telemedicine entity, that all 
of the following provisions are met:
    (i) The distant-site telemedicine entity's medical staff 
credentialing and privileging process and standards at least meet the 
standards at Sec.  482.12(a)(1) through (a)(7) and Sec.  482.22(a)(1) 
through (a)(2).
    (ii) The individual distant-site physician or practitioner is 
privileged at the distant-site telemedicine entity providing the 
telemedicine services, which provides the hospital with a current list 
of the distant-site physician's or practitioner's privileges at the 
distant-site telemedicine entity.
    (iii) The individual distant-site physician or practitioner holds a 
license issued or recognized by the State in which the hospital whose 
patients are receiving such telemedicine services is located.
    (iv) With respect to a distant-site physician or practitioner, who 
holds current privileges at the hospital whose patients are receiving 
the telemedicine services, the hospital has evidence of an internal 
review of the distant-site physician's or practitioner's performance of 
these privileges and sends the distant-site telemedicine entity such 
performance information for use in the periodic appraisal of the 
distant-site physician or practitioner. At a minimum, this information 
must include all adverse events that result from the telemedicine 
services provided by the distant-site physician or practitioner to the 
hospital's patients, and all complaints the hospital has received about 
the distant-site physician or practitioner.
* * * * *
    (c) * * *
    (6) Include criteria for determining the privileges to be granted 
to individual practitioners and a procedure for applying the criteria 
to individuals requesting privileges. For distant-site physicians and 
practitioners requesting privileges to furnish telemedicine services 
under an agreement with the hospital, the criteria for determining 
privileges and the procedure for applying the criteria are also subject 
to the requirements in Sec.  482.12(a)(8) and (a)(9), and Sec.  
482.22(a)(3) and (a)(4).
* * * * *

[[Page 25564]]

PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS

0
4. The authority citation for part 485 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395(hh)).

Subpart F--Conditions of Participation: Critical Access Hospitals 
(CAHs)

0
5. Section 485.616 is amended by adding a new paragraph (c) to read as 
follows:


Sec.  485.616  Condition of participation: Agreements.

* * * * *
    (c) Standard: Agreements for credentialing and privileging of 
telemedicine physicians and practitioners. (1) The governing body of 
the CAH must ensure that, when telemedicine services are furnished to 
the CAH's patients through an agreement with a distant-site hospital, 
the agreement is written and specifies that it is the responsibility of 
the governing body of the distant-site hospital to meet the following 
requirements with regard to its physicians or practitioners providing 
telemedicine services:
    (i) Determine, in accordance with State law, which categories of 
practitioners are eligible candidates for appointment to the medical 
staff.
    (ii) Appoint members of the medical staff after considering the 
recommendations of the existing members of the medical staff.
    (iii) Assure that the medical staff has bylaws.
    (iv) Approve medical staff bylaws and other medical staff rules and 
regulations.
    (v) Ensure that the medical staff is accountable to the governing 
body for the quality of care provided to patients.
    (vi) Ensure the criteria for selection are individual character, 
competence, training, experience, and judgment.
    (vii) Ensure that under no circumstances is the accordance of staff 
membership or professional privileges in the hospital dependent solely 
upon certification, fellowship or membership in a specialty body or 
society.
    (2) When telemedicine services are furnished to the CAH's patients 
through an agreement with a distant-site hospital, the CAH's governing 
body or responsible individual may choose to rely upon the 
credentialing and privileging decisions made by the governing body of 
the distant-site hospital regarding individual distant-site physicians 
or practitioners. The CAH's governing body or responsible individual 
must ensure, through its written agreement with the distant-site 
hospital, that the following provisions are met:
    (i) The distant-site hospital providing telemedicine services is a 
Medicare-participating hospital.
    (ii) The individual distant-site physician or practitioner is 
privileged at the distant-site hospital providing the telemedicine 
services, which provides a current list of the distant-site physician's 
or practitioner's privileges at the distant-site hospital;
    (iii) The individual distant-site physician or practitioner holds a 
license issued or recognized by the State in which the CAH is located; 
and
    (iv) With respect to a distant-site physician or practitioner, who 
holds current privileges at the CAH whose patients are receiving the 
telemedicine services, the CAH has evidence of an internal review of 
the distant-site physician's or practitioner's performance of these 
privileges and sends the distant-site hospital such information for use 
in the periodic appraisal of the individual distant-site physician or 
practitioner. At a minimum, this information must include all adverse 
events that result from the telemedicine services provided by the 
distant-site physician or practitioner to the CAH's patients and all 
complaints the CAH has received about the distant-site physician or 
practitioner.
    (3) The governing body of the CAH must ensure that when 
telemedicine services are furnished to the CAH's patients through an 
agreement with a distant-site telemedicine entity, the agreement is 
written and specifies that the distant-site telemedicine entity is a 
contractor of services to the CAH and as such, in accordance with Sec.  
485.635(c)(4)(ii), furnishes the contracted services in a manner that 
enables the CAH to comply with all applicable conditions of 
participation for the contracted services, including, but not limited 
to, the requirements in this section with regard to its physicians and 
practitioners providing telemedicine services.
    (4) When telemedicine services are furnished to the CAH's patients 
through an agreement with a distant-site telemedicine entity, the CAH's 
governing body or responsible individual may choose to rely upon the 
credentialing and privileging decisions made by the governing body of 
the distant-site telemedicine entity regarding individual distant-site 
physicians or practitioners. The CAH's governing body or responsible 
individual must ensure, through its written agreement with the distant-
site telemedicine entity, that the following provisions are met:
    (i) The distant-site telemedicine entity's medical staff 
credentialing and privileging process and standards at least meet the 
standards at paragraphs (c)(1)(i) through (c)(1)(vii) of this section.
    (ii) The individual distant-site physician or practitioner is 
privileged at the distant-site telemedicine entity providing the 
telemedicine services, which provides a current list to the CAH of the 
distant-site physician's or practitioner's privileges at the distant-
site telemedicine entity.
    (iii) The individual distant-site physician or practitioner holds a 
license issued or recognized by the State in which the CAH whose 
patients are receiving the telemedicine services is located.
    (iv) With respect to a distant-site physician or practitioner, who 
holds current privileges at the CAH whose patients are receiving the 
telemedicine services, the CAH has evidence of an internal review of 
the distant-site physician's or practitioner's performance of these 
privileges and sends the distant-site telemedicine entity such 
information for use in the periodic appraisal of the distant-site 
physician or practitioner. At a minimum, this information must include 
all adverse events that result from the telemedicine services provided 
by the distant-site physician or practitioner to the CAH's patients and 
all complaints the CAH has received about the distant-site physician or 
practitioner.

0
6. Section 485.635 is amended by adding a new paragraph (c)(5) to read 
as follows:


Sec.  485.635  Condition of participation: Provision of services.

* * * * *
    (c) * * *
    (5) In the case of distant-site physicians and practitioners 
providing telemedicine services to the CAH's patients under a written 
agreement between the CAH and a distant-site telemedicine entity, the 
distant-site telemedicine entity is not required to be a Medicare-
participating provider or supplier.
* * * * *

0
7. Section 485.641 is amended by revising paragraph (b)(4) to read as 
follows:

[[Page 25565]]

Sec.  485.641  Condition of participation: Periodic evaluation and 
quality assurance review.

* * * * *
    (b) * * *
    (4) The quality and appropriateness of the diagnosis and treatment 
furnished by doctors of medicine or osteopathy at the CAH are evaluated 
by--
    (i) One hospital that is a member of the network, when applicable;
    (ii) One QIO or equivalent entity;
    (iii) One other appropriate and qualified entity identified in the 
State rural health care plan;
    (iv) In the case of distant-site physicians and practitioners 
providing telemedicine services to the CAH's patients under a written 
agreement between the CAH and a distant-site hospital, the distant-site 
hospital; or
    (v) In the case of distant-site physicians and practitioners 
providing telemedicine services to the CAH's patients under a written 
agreement between the CAH and a distant-site telemedicine entity, one 
of the entities listed in paragraphs (b)(4)(i) through (iii) of this 
section; and
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare 
Supplementary Medical Insurance Program). (Catalog of Federal 
Domestic Assistance Program No. 93.778, Medical Assistance Program)

    Dated: January 27, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: April 29, 2011.
Kathleen Sebelius,
Secretary.
[FR Doc. 2011-10875 Filed 5-2-11; 11:15 am]
BILLING CODE 4120-01-P